Cypriot Admiralty Law: Ship Arrest
Ship arrest in Cyprus is governed by section 29 of Courts of Justice Law (14/1960) and by the Administration of Justice Act 1956 of the United Kingdom, which was enacted so as to bring into force the Ship Arrest Convention 1952. Cyprus is not directly a party to the 1952 Ship Arrest Convention nor the Brussels Liens and Mortgages Conventions.
The Supreme Court of Cyprus acts as the admiralty court and therefore holds the relevant jurisdiction (Section 19(a) of the Courts of Justice Law). However, pursuant to the amendment to the Courts of Justice Law (Law 136/1991), the District Courts of Cyprus may pass judgment on claims falling under €17,086.01 where such claims are in respect of the following:
(a) Goods supplied to the vessel for its maintenance;
(b) Loss or damage to goods carried on board the vessel;
(c) Construction, repair or supply of the vessel;
(d) Crew wages; and
(e) Expenses incurred on behalf of the vessel by her captain or any other supplier.
In addition, where the admiralty relates “to loss of life or personal damage caused as a result of a defect in the vessel or its equipment…” such claim will fall under the jurisdiction of the District Courts of Cyprus regardless of the amount of the claim.
An application for the arrest of a vessel may be filed by a debtor, provided that the debtor is not entitled to claim sovereign indemnity
Ship/Vessel Arrest Claims
An application for the arrest of a ship/vessel may be filed in respect of the following claims:
- Any claim to the possession or ownership of a vessel or to the ownership of any share therein;
- Any question arising between the co-owners of a vessel as to the possession, employment; or earnings of that vessel;
- Any claim in respect of a mortgage of or a charge on a vessel or any share thereof;
- Any claim for damage done by a vessel;
- Any claim for damage received by a vessel;
- Any claim for loss of life or personal injury sustained in consequence of any defect in a vessel or in her apparel or equipment, or of wrongful act, neglect, or default of the owners, charterers or persons in possession or control of a vessel or of the master or crew thereof or of any other person for whose wrongful acts, neglects or defaults the owners, charterers, or persons in possession or control of a vessel are responsible, being an act, neglect or default in the navigation or management of the vessel, in the loading, carriage or discharge of goods on, in, or from the vessel or in the embarkation, carriage, or disembarkation of persons on, in or from the vessel;
- Any claim for loss or damage to goods carried in a vessel;
- Any claim arising out of any agreement relating to the carriage of goods in a vessel or to the use or charter of a vessel;
- Any claim in the nature of salvage;
- Any claim in the nature of towage in respect of a vessel;
- Any claim in the nature of pilotage of a vessel;
- In respect of goods or materials supplied to a vessel for her operation or maintenance;
- Any claim in respect of the construction, repair, or equipment of a vessel or dock charges or dues;
- Any claim by a master or member of the crew of the vessel for wages and any claim by or in respect of a master or member of the crew of a vessel for any money or property which, under any of the provisions of the Merchant Shipping Acts 1894-1954, is recoverable as wages in the court or in the matter in which wages may be recovered;
- Any claim by a master, shipper, charterer, or agent in respect of disbursements made on the accounts of a vessel;
- Any claim arising out of an act which is or is claimed to be general average act;
- Any claim arising out of bottomry; and
- Any claim for the forfeiture or condemnation of a vessel or of goods which are being or have been carried, or have been attempted to be carried, in a vessel, or for the restoration of a vessel or any such goods after seizure, or for droits of admiralty.
Procedure to Arrest a Ship
Any person desiring the arrest of a vessel must file an ex parte application. In an ex parte application, the claimant is required to assist the Admiralty Court in reaching an informed and just decision. The claimant must not only convince the court that the conditions determined in the regulations have been met, but alsoprovide all material facts and details pertaining to the case that the court needs in order to reach an informed and correct verdict.
An affidavit must also be filed in support of the application for the arrest of the vessel, presenting background information of the case to be tried and stating that the assistance of the court is required. The affidavit must provide all data needed to satisfy the provisions of the rules, as well as the pre-conditions for the issuance of an arrest order.
The court must be satisfied that:
- There are matters which must be heard between the parties.
- The claimant has a right to have those matters heard.
- It is evident that the claimant has the right to have the matters raised by the oral evidence tried.
- The claimant is entitled to have the ship arrested.
Where the claimant (debtor) is successful in the claim on the application of arrest, the court will require the following:
- Proof of a deposit for the expenses which may be incurred by the Admiralty Marshall while holding in custody and supervision of the vessel under arrest;
- Proof of any other amount of money required by the Registrar for the expenses of the arrest; and
- Posting a security bond by way of a Cyprus Bank Guarantee.
- Usually 10%-15% of the claimed amount will need to be provided at the discretion of the court.
Failure of securing the above mandatory requirements would result in immediate release of the vessel.
The warrant for the arrest of the vessel must be executed by an officer in the way set out in the Admiralty Jurisdiction Order 1893. The vessel maybe arrested irrespective of the flag it carries
Release of a Ship under Arrest
The procedural rule sets out that any person may file an application for releasing a vessel under arrest and that the court may order the release of such vessel upon such conditions, after lodging a security or payment of any estimated costs with regard to the removal or inspection of the vessel. Causing a caveat against issuance of any warrant of arrest, to be filed with the Registrar in a book to be kept for that purpose, called the Caveat Book .Thus, any application for the release of a ship should be conducted through the submission of an autonomous action for such release.
An alternative route: A ‘freezing’ injunction it’s an option, which is made ex-parte. By seeking such an injunction, normally granted when the defendants have no further assets in Cyprus and there is a plausible risk of alienation of assets.